Saudis In Covert-aid Web

Probe Reveals Role In Arming Afghan Rebels

December 07, 1986|By Terry Atlas and James O`Shea, Chicago Tribune.

-- Sources in Israel, which is trying to downplay its role in the controversy, said Khashoggi, who is sometimes described as the world`s richest man, may have helped finance some of the arms shipments and may have acted as a ``cut-out,`` enabling the Saudi government to deny any role in the operation.

Khashoggi denied that he has acted on behalf of the Saudi government

``directly or indirectly, in any matter relating to the sale or other transfer of arms to Iran`` or in aid to the contras. Senior members of the Saudi government and royal family informed senior Reagan administration officials last week that Khashoggi did not represent the Saudi government, and some knowledgeable American officials believe that Khashoggi may well have been acting on his own.

-- A pattern of Saudi diplomatic contacts with Iran seems to parallel U.S. diplomatic efforts to open talks with officials in Tehran. Most notably, a special emissary from King Fahd of Saudi Arabia arrived in Tehran the same day that McFarlane arrived there on his secret mission.

That aside, many Middle East experts believe that the Saudis, for perhaps the last 18 months, seemed to be reopening their own contacts with Iran, which they once viewed as a military and ideological threat to the Saudi monarchy.

There is a ``convergence of interests`` among Iran, Saudi Arabia and the U.S. on the need to end a decline in oil prices that has hurt the economies of oil-producing countries and the American Southwest, said a source close to the Saudis.

There also is a history of U.S.-Saudi involvement in places like South Yemen, which had been threatening North Yemen, a Saudi ally; Jordan, Pakistan, Sudan and particularly Afghanistan.

``If money is necessary to do something--to keep an economy afloat or to fund rebels--somebody will think to try getting the Saudis to pay for it,`` a former senior State Department official said.

In its drive to steer a $265 million Saudi arms package through Congress last June, the administration said that Saudi Arabia`s behind-the-scenes financial and political support has helped the U.S. in the Middle East and in sustaining the ``freedom fighters`` in Afghanistan.

The CIA used one of its secret Swiss bank accounts that had been established to handle money for the Afghan rebels to funnel Iranian arms payments to the U.S., exposing for the first time the extent of U.S. and Saudi financing for the Afghan rebels. The Saudis turned over to the CIA $250 million a year, to be matched with U.S. money appropriated by Congress, all of which is managed by the intelligence agency, according to sources familiar with the arrangement.

The sources said the Saudis sent another nearly $250 million to the Afghan resistance, either directly or through various Islamic intermediaries. The CIA also manages additional millions available to the Afghans from highly classified Pentagon accounts, according to a government source.

There have long been rumors of Saudi money going to the contras, but sources said that may have been a cover story concocted to explain the millions of dollars available for the Nicaraguan rebels as a result of profits skimmed from covert U.S. arms sales to Iran.

The U.S. ``made the pitch`` for the Saudis to help finance the Nicaraguan resistance fighters but the Saudis decided not to get involved, a source said, because the conflict is too far from direct Saudi interests and because doing so would put them ``in bed with the Israelis,`` who are secretly involved in the Central American conflict.

``The U.S. government on several occasions has requested the Saudis to put money into our operations,`` said one government official who has helped plan covert operations.

``But they have not been very helpful unless it is in their own interests too.``

The Saudis insist there was no cooperation involved in the Iranian arms deals, and one source described Prince Bandar as furious that his government was not told about something so important in its own part of the world.

``He was jumping up and down like a yo-yo about it,`` said one source, who said the ambassador complained to Secretary of State George Shultz, Defense Secretary Caspar Weinberger and then-national security adviser John Poindexter.